Successful investing will necessarily become more than the science
of maximizing digital wealth by anticipating technological progress and
monetary policy.

Notwithstanding apparent stock market strength, major
investors
risk great loss to any extent they rely on extraction of irreplaceable
primary materials, and upon police and military to restrain the
market's
losers. The global market gallops too fast to allow most investors to
closely consider the depletion of essential soils, fresh water,
minerals
and fuels, upon which all commerce depends. Although dysfunctions such
as
pollution, crime, famine, epidemics and war are profitable for some
sectors, they damage longrange market expansion. Prevailing narrow
assumptions about profitability would eventually impose hard discipline
upon rich and poor alike.

But rather than further argue these urgencies, raising
alarms about
the invasion of externalities, this article describes benefits to the
macroeconomy of community paper money, which stimulates real
growth while
addressing global threats. Its main premise is that the health of the
macroeconomy depends ultimately on the vigor of city and village
economies,
just as healthy lungs depend on tiny air sacs.

Replenishment of any market demands capitalization of
microenterprise innovation-- many largest corporations started in
kitchens
or garages. Zero-interest community currency microloans, too small for
commercial lenders, can help start or expand promising new small
businesses. Simultaneously, new local money opens new local markets for
these businesses.

The durability of money
depends upon commodity backing, and the
capacity of real people to buy commodities. There is not enough real
production (97.5% of foreign exchange trade is currency futures, etc.)
to
justify the volume of digital trading driving stocks up. Nor is there
any
longer enough gold or silver available to provide hard money for the
volume
of commodity trading needed to sustain six billion humans. The more
direct
relation between community currency supply and local commodity backing
can
provide stability to federal dollars.

Moreover, supplemental local cash, targeted to small
businesses and
under/unemployed sectors, enables more local trading to take place,
which
expands formal business activity and improves creditworthiness.
Community
currency is a powerful way to bring underutilized labor and talent into
local markets, which then feed regional and global trade.

Because local currency is money with a boundary around
it, the
locality gains an infinite multiplier. Yet rather than isolate
communities, local cash frees them from the isolation imposed by
capital
outflows and by low service sector wages, which restrain trade. Local
currency enables cities to reach other cities from strength, by
maximizing
their latent resources to export more and import more. Citizens may
even
travel more with extra income.

Especially importantly, local currency trading
reinforces direct
face-to-face commerce, as at farmer's markets, where citizens learn
about
one another as resources, rather than as competitors for scarce
dollars.
They become friends, lovers and political allies. They make communities
while making a living.

For these reasons, since 1991, thousands of residents
of Ithaca,
New York, including 500 businesses (including a bank, movie theaters,
health clubs, local farmers and the hospital), have traded several
million
dollars with their own paper cash, the Ithaca HOUR (One HOUR = one hour
of
basic labor or $10.00). Dozens of zero-interest HOUR loans have been
made.
HOUR grants have been given to over 100 local organizations. There are
now
dozens of HOUR systems in North America (from Brooklyn to Santa
Barbara) and worldwide (from China to Argentina) based on this model.

Ithaca HOURS are backed by thousands of goods and
services listed
in the local currency directory HOUR Town. Since the correlation
between
the HOUR supply and commodity backing is direct (food is Ithaca's
largest
category), we call HOURS real money. HOURS are also backed by labor, a
measure of value as steady as the clock.

Ithaca's elected HOUR directors
(Municipal Reserve Board) carefully
monitor circulation to prevent inflation. There is presently generally
greater demand for HOURS than supply, so issuance policy has changed to
carefully accelerate supply. Currently, there are agreed caps on HOURS
outstanding as loans.
Fourteen percent of total HOURS issued
(plus 25% of HOUR loans repaid) may be issued as community grants. Five
percent of HOURS may be issued as grants to the system itself. The
remaining HOURS are issued as modest start-up payments to businesses
and
individuals who provide published backing for HOURS by agreeing to be
listed in HOUR Town. The HOUR system funds itself through sales of ads
in
its directory, by repayment of HOUR loans with dollars, and through
grants.

Ithacans have even created their own
locally-controlled, nonprofit,
democratically-managed health security system (Ithaca Health Fund),
using
local currency. Small businesses otherwise unable to provide health
coverage have relied on the Health Fund to improve labor stability.

Although chain stores and commercial banks have not yet
chosen to
accept local cash, they've benefitted already by extra discretionary
dollars in the local market. When an HOUR is spent, for food or rent,
ten
additional dollars are also available to spend.

Although it's reasonably assumed that cash trading
fosters tax
avoidance, and though many people must decide whether to feed their
government or their family, overall the economic stimulus provided by
HOURS
to retailers has increased local sales tax collection.

While lower wages are assumed better for business, the
higher HOUR
minimum wage ($10.00) enables workers to spend who otherwise stay home.
At
the same time, the HOUR is flexible: professionals may charge multiple
HOURS per hour. Yet we note that many professionals charge HOUR users
less, in the spirit of the system. More local money among the poor
enables
more national money to trickle up and down, and reduces the explosive
disparity of wealth.

And while it's often assumed that we become wealthier
the faster we
consume resources and throw them away, local currencies enable us
readily
to expand ecological economic activity.

Take for example the assumption that, for construction
to thrive, our
cities must build taller, consume vast hinterlands, yield to ever-wider
highways and ever-more cars, and must spread across forests and farms.
As
author of the book "Los Angeles: A History of the Future,"
I've
offered a systematic scenario for rebuilding Los Angeles toward balance
with nature-- a massive process requiring decades, costing
trillions, and
producing beautiful, practical and profitable neighborhoods.

Replicated worldwide, such urban reconstruction would
restart
markets afresh. Billions of workers now underemployed would find their
creativity engaged. Reliance on unemployment as a tool of labor control
would be overridden by realization that idle labor is idle capital, as
the
world approached universal sufficiency.

There is now far more money to be made, for far longer,
by
replenishing the earth and its cities
than by exploiting dysfunctions.
Investment in community currency systems brings such choices alive and
helps establish the conditions for unlimited growth of a global
economy.

A planet of such communities, linked by national and
supranational
currencies which are themselves backed by hundreds of thousands of
local
currencies (whose integrity is credentialed), will likelier maintain
stable, well-fed populations.

Such a world could still accommodate singularly wealthy
people in
beautiful homes, proud of investments that have made everyone's life
easier. But they would be less pressured to consume conspicuously. They
and
their children would enjoy wealth even more fundamental than their bank
accounts, and
be far more secure from social upheaval.

Economic activity should be fun and beneficial. Who will lead?
Exploring beyond
conventional investment and embracing such new
opportunities may be where really smart money goes. We believe these
opportunities begin with local currency.

Paul
Glover is founder of Ithaca HOURS and the Ithaca Health Fund, holds
degrees in Advertising and in City Management, and founded Citizen
Planners
of Los Angeles. He is author of Hometown Money. He
consults with commmunities about grassroots economic development. (215)
805-8330 paul5glover@yahoo.com